Tag Archives for Great Australian Bight

This week’s decision by Norwegian company Equinor to abandon a A$200 million plan to drill for oil in the Great Australian Bight surprised both its critics and backers.

Equinor says it abandoned the project off the remote South Australian coast because it was not “commercially competitive”.

But the plan was flawed from its inception. It was out of step with the investment community’s reduced appetite for frontier fossil fuel exploration, and growing concern about financial exposure to carbon risk. A broad section of the community opposed it on environmental grounds, including the potential for a possibly catastrophic oil spill.

Equinor’s decision is an important win for many Australians, but we cannot rest on our laurels. Reform of Australia’s offshore petroleum laws is urgently required to permanently protect our precious marine environment.

The Great Australian Bight is a unique ecosystem and must be protected.Sascha Grant/Flickr, CC BY

A risky endeavour

In May last year, a group of multi-disciplinary experts, including the authors of this article, made a submission to the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), highlighting the risks inherent in Equinor’s proposal.

Exploratory drilling has taken place in the Bight since the 1960s. However, Equinor’s proposal involved drilling 370km off the coast in waters up to 2,500 metres deep. This brought extra technical complexity and made the proposal very expensive and environmentally risky.

Equinor’s well would have been located in the Ceduna sub-basin, off southern Australia.NOPSEMA

Equinor’s environment plan also made overly optimistic assumptions and was inadequate in many ways, including the following:

However, we believe the company did not comprehensively demonstrate how it would mitigate impacts on endangered species found within its well area.

Many species listed as threatened may have been affected by the drilling activities. These include a total of 28 listed migratory species, 20 listed marine species (including the endangered southern right whale, sea lions, dolphins, southern bluefin tuna and sharks) and five listed cetacean species.

Among the shortcomings in the environment plan, it did not outline how drilling would indirectly and directly affect the capacity of listed threatened species to restore their poulations, as is required under the Commonwealth Environment Act.

The Conversation contacted Equinor for a response to this criticism. Equinor said its environment plan “was accepted by the independent regulator in December 2019. The plan submitted and accepted demonstrated our ability to drill the exploration well safely”.

– Public consultation

Equinor conducted only limited public consultation – within a 40-kilometre radius of the well site. This excluded many relevant parties with a shared concern for the local environment.

The consultation approach also ignored the fact that if a significant accident occurred, such as the worst-case oil spill, there was a risk of harm to communities thousands of kilometres away.

It was particularly egregious that Equinor failed to consult any Indigenous organisations despite numerous Indigenous sea and land title claims that may have been affected by a spill.

Equinor also excluded 18 coastal councils from consultation, as well as conservation groups.

In response to this criticism, Equinor said it “engaged broadly with the community to provide information about our company and our plans for the Stromlo-1 exploration well, holding more than 400 meetings with stakeholders”. It said the consultation process complied with relevant legislation.

– Oil spill modelling

Equinor took a very conservative approach to oil spill modelling. Its modelling of the “worst case discharge scenario” predicted a far lower oil flow rate than modelling by BP in 2016 for the same well location.

But the scenarios Equinor developed would still have amounted to a catastrophic and unprecedented environmental event: a discharge of 42,387 barrels per day until the well was killed after 102 days, or 4,323,478 barrels of oil in total. This is a similar to the amount of oil estimated to have entered the Gulf of Mexico following the Deepwater Horizon disaster.

In response, Equinor said its oil spill maps “do not represent what a single spill would look like, or the area it would affect. To make sure we have planned for anything that could possibly happen, regardless of how unlikely it is, legislation requires us to form a single map by superimposing 100 different simulations of a worst-case oil spill under varying weather conditions”.

Why did Equinor jump ship?

Equinor says it abandoned its plans for commercial reasons – the same reason cited by BP and Chevron.

The company’s decision came just weeks after the federal regulator granted environmental approval to the company’s proposed Stromlo-1 well after three failed attempts.

So after pouring so much money and effort into the project, why would Equinor jump ship now? We believe other factors were also at play.

First, the project failed to gain a social licence. Public surveys showed 60% of people nationally and 68% of people in South Australia opposed Equinor’s plans.

Second, it faced ongoing legal hurdles. The Wilderness Society had mounted a Federal Court challenge to the environmental approval over Equinor’s failure to consult relevant parties.

Third, and more broadly, much of the world is moving away from fossil fuels. The European Investment Bank is phasing out fossil fuel financing and the International Energy Agency has called on oil and gas companies to lower their emissions, warning that not doing so “could threaten their long-term social acceptability and profitability”.

Europe is moving away from oil, in a move that threatens the offshore petroleum industry.DIAMOND OFFSHORE DRILLING INTERNATIONAL

So what now?

Australia’s oil and gas industry is not going away. So in light of the risks, how do we protect marine life into the future? The answers may come from Equinor’s home country Norway.

The Norwegian government owns a two-thirds stake in Equinor. The government’s pension fund has announced plans to divest A$17 billion worth of fossil fuel stocks, and Equinor itself aims to reduce emissions from offshore fields and onshore plants in Norway by 40% by 2030, and to near zero by 2050.

In Norway, oil wells are operated in accordance with a standard requiring companies to demonstrate “fitness to drill” before work begins. This is not required under Australian regulations, which apply the lesser standard of “good oilfield practice”.

In developing petroleum resources, The Norwegian Petroleum Act requires titleholders to take “a long-term perspective for the benefit of Norwegian society as a whole”. This requires contributions to the welfare, employment and improved environment of the nation.

Australia’s Equinor experience has made one thing very clear: in protecting both our environment and the interests of future generations of Australians from the effects of fossil fuel extraction, this nation still has a lot to learn.

The Great Australian Bight is home to a unique array of marine life. More than 85% of species in this remote stretch of rocky coastline are not found anywhere else in the world. It’s also potentially one of “Australia’s largest untapped oil reserves”, according to Norwegian energy company Equinor.

Equinor has proposed to drill a deepwater oil well 370km offshore to a depth of more than two kilometres in search of oil.

But a recent poll showed seven out of ten South Australian voters are against drilling in the Bight. And hundreds of people recently gathered on an Adelaide beach in protest.

Their main concerns include the lack of economic benefits for local communities, more fossil fuel investment, weak regulation and the potential for an oil spill, devastating our “Great Southern Reef”.

Drilling in the Great Australian Bight has occurred since the 1960s, but never as deep as what Equinor has proposed.

The Coalition government argues the project will improve energy security and bring money and jobs to the region. Labor announced recently that, if elected, it would commission a study on the consequences of a spill in the region.

So what’s the worst that could happen?

As discussed in a Sydney Environment Institute workshop in April, drilling in the Bight would have disastrous environment and economic implications.

A spill could leak between 4.3 million barrels and 7.9 million barrels – the largest oil spill in history, according to estimates from the 2016 Worst Credible Discharge report, authored by Equinor and its former joint-venture partner, BP.

The Bight is a wild place, with violent storms and strong winds and waves. The geography is remote, unmonitored, largely unpopulated and lacks physical infrastructure to respond effectively to an oil spill.

In such an event, Equinor has said it would take 17 days to respond in a best-case scenario. The worst-case scenario is 39 days, and the goal scenario is 26 days.

In modelling for the worst-case scenario, the company predicts the oil from a spill could even reach from Albany in Western Australia to Port Macquarie in New South Wales.

How likely is an oil spill?

Reports from Norwegian regulators, compiled by Greenpeace, reveal Equinor had more than 50 safety and control breaches, including ten oil leaks, in the last three-and-a-half years. Each incident occurred in regulatory environments with stricter conditions than in Australia.

Our independent regulator, NOPSEMA, does not require inspections of wells during construction to ensure they meet safety standards.

NOPSEMA does not have a set standard for well control. This is a risky proposition because in recent years three of the four major international oil spills from well blowouts occurred in exploration wells, the kind planned for the Bight.

And Greenpeace has questioned the independence of NOPSEMA after it was revealed the regulator will speak at an event promoting oil exploration in the Great Australian Bight.

Adding billions to the GDP, but there’s a catch

Equinor’s proposed project risks local fishing and tourism industries that rely on a pristine natural environment and contribute $10 billion a year to our economy, twice as much as the Great Barrier Reef.

The Great Australian Bight is home to at least 14 schools of bottlenose dolphins.Shutterstock

A 2018 ACIL Allen report on the economic impact of drilling in the Great Australian Bight suggested Australia’s GDP could gain A$5.9 billion a year if the region turns out to be a major oil field.

But the catch is that this would require 101 oil wells to be successfully drilled, and many of the expected benefits wouldn’t be realised until between 2040 and 2060. What’s more, this windfall wouldn’t reach the pockets of locals, but would largely land in federal government coffers via the Petroleum Resource Rent Tax.

These predictions are based on optimistic estimates of oil prices, and the report assumes our oil demand will remain on an upwards trajectory, which would mean we breach the Paris targets by a significant margin.

Worryingly, Equinor’s former partner in this venture, energy giant BP, even tried to claim an oil spill would benefit the local economy, and said:

In most instances, the increased activity associated with cleanup operations will be a welcome boost to local economies.

There is little evidence to support the argument that this drilling will lead to better energy security.

Given Australia doesn’t have the capacity to refine oil domestically, it’s likely most, if not all, of the oil extracted would be processed overseas.

From a security point of view, far more impact would come from reducing our reliance on oil through better vehicle emission standards and promoting a system-wide shift to electric vehicles.

No real benefit to the community

The Great Australian Bight is home to Australia’s most productive fishery, which directly employs 3,900 locals. An oil spill would threaten 9,000 jobs in South Australia alone.

By comparison, Equinor claim that the construction phase of the project would create 1,361 jobs, most of which require experience that would not be found in local communities. For instance, fly-in fly-out workers from Adelaide would take ongoing jobs on the rigs.

Equinor has had more than 50 safety and control breaches in the last three-and-a-half years, occurring in stricter regulatory environments than in Australia.Shutterstock

Equinor has already completed seismic testing, which involves firing soundwaves into the ocean floor to detect the presence of oil and gas. The testing alone has pushed schools of tuna further out to sea, increasing costs and risks for local fisherman.

You decide, is it worth it?

Decisions over resource projects with significant environmental impacts need to be based on a thorough cost-benefit analysis and include the precautionary principle.

The economic advantage to either local communities or the Australian public from this proposal is in doubt. And Australians are entitled to ask their politicians why so little is demanded of these organisations.

In the lead-up to a critical federal election, we are left to ask why our political leaders are doubling down on a fossil fuel bet with no clear advantages and a significant downside risk.

Aboriginal rangers will be managing a new reserve in Central Australia’s Tanami Desert region. The reserve is to be called the Southern Tanami Indigenous Protected Area, which forms part of the Trans-Australia Eco-link which joins Arnhem Land with the Great Australian Bight. The link below is to an article that looks at the creation of this new reserve.